Cisco to buy Acacia Communications for $2.8 billion

Cisco to buy Acacia Communications for $2.8 billion
The logo of U.S. networks giant Cisco Systems is seen at their headquarters in Issy-les-Moulineaux, near Paris, France, April 3, 2018. REUTERS/Philippe Wojazer -
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PHILIPPE WOJAZER(Reuters)
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(Reuters) – Network gear maker Cisco Systems Inc <CSCO.O> said on Tuesday it would buy optical component maker Acacia Communications Inc <ACIA.O> for $2.84 billion (£2.28 billion) in cash.

The $70 per share offer represents a premium of about 46% to Acacia’s closing price on Monday.

The deal is Cisco’s biggest acquisition for Cisco since its $3.7-billion purchase of business performance monitoring software company AppDynamics in 2017.

Shares of Acacia rose about 40% to $67.30, while those of Cisco were down nearly 1% at $55.80.

Excluding Acacia’s cash and marketable securities, the deal is valued at $2.6 billion, Cisco said.

The acquisition is expected to close in during the second half of Cisco’s full year 2020.

Maynard, Massachusetts based Acacia, also a Cisco supplier, designs and manufactures high-speed, optical components, and counts telecom service providers and data centre operators as customers.

(Reporting by Akanksha Rana in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)

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